In the first quarter of 2024, Portugal saw the biggest increase in the unemployment rate since the worst moment of the pandemic (first quarter of 2021), according to official data by the Ministry of Labour.
The volume of job offers from companies is also in sharp decline, having fallen at the highest rate since the beginning of 2021, according to a survey carried out by DN/Dinheiro Vivo.
It is worth remembering that at the beginning of 2021, the most lethal phase of the covid-19 pandemic, lockdowns paralysed economic activities based on personal contact. Many companies went bankrupt, others were forced to close temporarily or drastically reduce their activity.
According to the IEFP, the total number of registered unemployed in the country in March this year was 18,459 more than in the same month in 2023, a year-on-year increase of 6 per cent. At the end of the first quarter there were 324,616 people without work registered with the employment services.
The data also also shows that the number of people receiving unemployment benefits in March rose by 9.1% year-on-year to 195,359.
Job vacancies dwindle
The IEFP's portrait of the labour market also signals another worrying situation: a sharp downturn in job offers through the IEFP network.
With interest rates at very high levels, many companies are finding it difficult to expand or maintain their businesses. Job offers at the end of the first quarter totalled just 12,100, a drop of 27% compared to the same period last year.
This means that more than a third of the unemployed don't receive any kind of unemployment support. Around 64% of the total (195,359) are on benefits.
"At the end of March 2024, there were 12,113 unfulfilled job vacancies in Employment Services across the country. This figure corresponds to a decrease in vacancies in the annual analysis (-4509; -27.1%)," he confirms.
One has to go back to 2020 to find a greater reduction in job offers in the first quarter, according to the same survey carried out by DN/DV using IEFP data.
Unemployment is a serious phenomenon, especially in the current climate of high interest rates and loss of purchasing power in the food basket (which continues to be heavily penalised by very high inflation), but it is especially critical for families where the couple (marriages and civil partnerships) has both people out of work at the same time. According to the IEFP, the number of cases in which both members of the couple are unemployed rose by almost 6% between March 2023 and the same month this year (to 5032 cases), the biggest increase since March 2021.
North, property, accommodation and catering in the red
According to the data, the largest increase in cases of unemployment (+19.1 thousand cases in absolute terms) took place in the North (8.5 thousand registered cases, half, therefore), but the biggest year-on-year rise is in the Algarve (up 14%).
The same statistical note indicates that the sectors most affected by unemployment in the first quarter of this year are Real Estate Activities (9.6 thousand more people registered at IEFP centres than in March 2023); Accommodation and Food Services (3.2 thousand more people out of work); Leather and footwear industry (1.9 thousand more unemployed and the biggest year-on-year increase, an impressive 77%).
The clothing manufacturing sector added another thousand unemployed to the IEFP list, making it the fourth worst sector in terms of evolution.
There was only one sector where the IEFP unemployment rate didn't rise: banking and insurance, where the number of people registered fell by 36.
Positive outlook
Despite this unfavourable picture, the main institutions continue to point to a stabilisation of the unemployment rate and a dynamism in employment, albeit slight.
According to the IMF, expectations for job creation this year are significantly stronger than the government says (both assuming unchanged policies, just the effect of the 2024 State Budget already approved and in force).
The Fund points to a net increase of 1% in national employment, while the PSD-CDS government only sees an increase of 0.4% in the update to the Stability Programme (SP 2024-2028). That's more than double, according to the IMF.
The institution led by Kristalina Georgieva predicts a small drop in the unemployment rate from 6.6% of the working population in 2023 to 6.5% this year.